Wireless industry revenue rose less than 1% in Q3 from Q2. Verizon Wireless led phone companies with just 2.3% growth, says a UBS report.

Softbank Chairman Masayoshi Son has signaled he wants Sprint to take share from Verizon and AT&T. View Enlarged Image

Industry revenue "growth" might turn negative in 2013, Bernstein Research warns, because subscriber growth has stalled. Most consumers who can afford smartphones have them.

Nomura Equity Research, meanwhile, says that investors should focus on revenue growth more than ever, because other financial metrics that wireless firms report — subscriber additions and average monthly spending — are misleading, as definitions vary.

Nomura analyst Mike McCormack estimates service revenue will see a compound annual growth rate of 4.9% for 2013 to 2015, but his forecast is for only the big four national carriers: Verizon Wireless, AT&T (NYSE:T), Sprint Nextel (NYSE:S) and Deutsche Telekom-owned T-Mobile USA.

As a new year begins, one hope for wireless firms looking to recharge growth is to add new ingredients to their growth recipe — connecting cars, medical devices and industrial machines to 4G data networks.

AT&T aims to expand its "digital life" home automation services, including security and remote energy monitoring, in 2013. It launched the service in May. It's also targeting health care.

Revenue growth could pick up again to the mid-single digits if autos and other new markets kick in, says Roger Entner, founder and analyst at Recon Analytics.

"We're running out of people who want wireless, but home security and automotive connectivity could be an explosive point," he said. "We're going to have more and more devices connected. We could see 200 million cars over the next 15 years. Automakers will pay for it as a retention tool."

He says the industry's size is one factor in slowing growth. U.S. wireless services revenue will be about $180 billion in 2012.

4G Race Boosts Spending

Wireless service providers are looking at a tough 2013 as competition intensifies and their capital spending rises.

Japan's Softbank in October agreed to buy a 70% stake in Sprint for $20.1 billion, giving Sprint a much-needed cash infusion. Sprint this month agreed to buy full ownership of Clearwire (), giving it more radio spectrum for 4G services.

Softbank Chairman Masayoshi Son has signaled he aims to take U.S. share from Verizon and AT&T with price cuts, much as Softbank did in Japan, Moffett says.

Analysts also expect more aggressive marketing from T-Mobile USA, which plans to merge with MetroPCS Communications (). And T-Mobile will sell Apple's (NASDAQ:AAPL) iPhone for the first time in 2013.

Some analysts say Verizon Wireless is best able to handle the industry's slowing growth. Analysts expect Verizon to continue dominating in "postpaid" subscriber additions — customers that sign service contracts and spend more on data.

In Q3, Verizon Wireless added 10 times as many postpaid subscribers (1.5 million) as AT&T.

Verizon and AT&T now count tablet computer users as new "postpaid" subscribers.

AT&T followed with a similar offer. The wireless firms are betting that increased data consumption will drive up revenue.

Macquarie Capital analyst Kevin Smithen estimates Verizon Wireless will add 2 million postpaid customers in Q4, up from 1.2 million in Q4 2011.

Smithen estimates 300,000 to 400,000 of those additions will come from tablet users.

Pacific Securities analyst Michael Bowen says Verizon's gains in postpaid subscribers will result in stronger revenue growth than the rest of the industry.

"Verizon has taken significant share over the last couple of years on the strength of its first-mover advantage in LTE rollout," he said in a report. "Verizon is likely to continue to outpace the competition over the next 12 months."

See Also

Dish Network (NASDAQ:DISH), the nation's second largest satellite TV provider, is pitching expanded baseball, including the addition of MLB Extra Innings, to subscribers. Dish, Major League Baseball and MLB Advance Media jointly announced the multiyear deal Tuesday, just ahead of the start of the ...

Highly innovative firms grow on average three times faster than other companies over a five-year period, according to a study by PricewaterhouseCoopers. That's from Rowan Gibson, author of "The Four Lenses Of Innovation." He stresses that innovation isn't a "mysterious mix of creative chaos, ...

Apple (NASDAQ:AAPL) could see an extra 5 cents per share in earnings in the March quarter from a patent sale last month, Well Fargo Securities said in a research report Tuesday. An entity called Rockstar Consortium on Feb. 3 completed the sale of more than 4,000 patents to RPX for $900 million. RPX ...

IBM (NYSE:IBM) announced an alliance Tuesday morning with The Weather Channel to turn its Watson data-crunching prowess on the weather, the latest in a series of major pacts to try to revive growth. IBM and WSI, parent company of The Weather Channel, announced a "groundbreaking global strategic ...

12:43 AM ET

More Technology Articles:

Google's (NASDAQ:GOOGL) new computer doesn't look much like one. In addition to the debut of its new Chromebooks Tuesday, the Internet giant unveiled a thumb-sized dongle that can transform any TV or monitor display into a full-fledged computer with Chrome OS. As big as a streaming stick or USB ...

A new survey found that 2 in 3 users of Apple Pay report having problems using the payment service at checkout. The study was done by Phoenix Marketing International, as reported by Bloomberg on Tuesday. "They've created demand, but it can't be fulfilled," Greg Weed, Phoenix's director of card ...

Ambarella (NASDAQ:AMBA) has reached profit-taking zone less than one month after clearing its consolidation. The GoPro (NASDAQ:GPRO) chip supplier may have worried investors last week, when it sank almost all the way back to the buy point in intraday trade as the entire chipmaker group sold off. ...

GoDaddy (NYSE:GDDY) is set to price its initial public offering after the close Tuesday in a deal set to raise about $396 million, giving it a market valuation near $3 billion. The company is the largest provider of Web hosting services, including domain names and website building. It says it has ...

Memory-chip maker Micron Technology (NASDAQ:MU) is expected to post flat revenue growth and a decline in earnings when it reports second-quarter results after the market closes Wednesday. The company had previously scheduled the financial results to be issued on Thursday, just ahead of the holiday ...

Select market data is provided by Interactive Data Corp. Real Time Services. Price and Volume data is delayed 20 minutes unless otherwise noted, is believed accurate but is not warranted or guaranteed by Interactive Data Corp. Real Time Services and is subject to Interactive Data Corp. Real Time Services terms. All times are Eastern United States. *Reflects real-time index prices.